Dive Brief:
- Kroger confirmed Thursday it plans to invest $1 billion in price cuts if it consummates its merger with Albertsons.
- The figure is double the amount the grocer previously pledged to put toward price cuts linked to the proposed mega-merger.
- Kroger is stepping up its promise to reduce prices as it looks to sweeten the nearly $25 billion merger to appease regulators bent on stopping the transaction.
Dive Insight:
Kroger is coming under even sharper scrutiny as it seeks to complete its merger with Albertsons as the grocery industry continues to deal with consumer concerns about high food costs.
Kroger has long emphasized that joining with Albertsons would lead to lower prices for grocery shoppers. In February, when Kroger promised to lower prices following its proposed merger with Albertsons, the grocery company noted that the strategy is “not new” as it has lowered prices after the approval of previous mergers.
“As we’ve prepared for integration since announcing our planned merger nearly two years ago, we continued our ongoing work to confirm and increase opportunities to generate efficiencies to invest back in customer prices, associate wages and store experience,” Kroger said in an emailed statement on Thursday.
The price cuts are part of a list of promises Kroger has made linked to the merger, including pledges to expand employee resources and boost its local assortment.
Last month, a Colorado judge issued an order that temporarily blocks the proposed merger, and the two grocers agreed not to consummate their merger until the state court rules on a lawsuit brought by Colorado’s attorney general seeking to permanently block the deal.
Kroger and Albertsons are preparing to face the Federal Trade Commission in court, with a hearing scheduled to start on Aug. 26 in the U.S. District Court for the District of Oregon in Portland.
